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Yesterday, the market saw little change in trend, with a cautious stance near recent highs. The aftermath of the CPI release combined with a $22 billion increase in the issuance of 30-year Treasury bonds led to an initial bearish trend in bond yields. Additionally, early signs of reflation trading emerged in the market as copper prices broke a two-year downtrend, and US inflation swaps rose to a three-month high. Despite persistent inflation, the Federal Reserve may still maintain its accommodative policy. In the short term, the focus may shift back to long-term yields, especially with uncertainty lingering over how the market will react to the Bank of Japan's potential withdrawal of yield curve control next week.
Record wage increases by Japanese unions, coupled with signs that the Bank of Japan may finally be poised to exit negative interest rate policy, have resulted in gains for the Shanghai Composite Index (+3%) and the largest drop in Chinese government bonds since 2021 (with prices falling and yields rising). Will China's recent deflationary pressures also be relieved? Will we witness a synchronized reflationary trend globally as central banks remain steadfast in their accommodative policy stance?
Nothing can change market sentiment quite like prices. Microstrategy announced its second convertible bond issuance this month, raising $500 million to purchase more Bitcoin. The company has already bought over $1 billion worth of Bitcoin in the first quarter of this year, largely benefiting from the early sale of convertible bonds, with net proceeds exceeding $800 million. Its stock price has surpassed its 2021 high, approaching half of the peak during the 1999 dot-com bubble. With the cryptocurrency market showing no signs of slowing down, will history repeat itself? |
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Post time 24-3-2024 05:53:38
